Obesity remains a serious health problem and it is no secret that many people want to lose weight. Behavioral economists typically argue that “nudges” help individuals with various decisionmaking flaws to live longer, healthier, and better lives. In an article in the new issue of Regulation, Michael L. Marlow discusses how nudging by government differs from nudging by markets, and explains why market nudging is the more promising avenue for helping citizens to lose weight.

Two long wars, chronic deficits, the financial crisis, the costly drug war, the growth of executive power under Presidents Bush and Obama, and the revelations about NSA abuses, have given rise to a growing libertarian movement in our country – with a greater focus on individual liberty and less government power. David Boaz’s newly released The Libertarian Mind is a comprehensive guide to the history, philosophy, and growth of the libertarian movement, with incisive analyses of today’s most pressing issues and policies.

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What about the 99 Percent?

I would never have guessed that lowering this particular borrowing rate would be a significant policy move. But the opinion of the stock markets is that it is a major development, perhaps a decisive move.

The action leaves some important matters unchanged. No government has brought its budget under control. No political impasse has been broken. No bank has become better capitalized. No wages within the euro zone have adjusted to address their misalignment. And yet the markets are in a state of euphoria. It is like watching Ben Bernanke play Peter Pan, the European banks as an ailing Tinkerbell, and the stock market as the audience, fervently proclaiming “We believe in fairies!”

Walter Bagehot’s classic line about central banking is that in a crisis you must be willing to “Lend freely, at a penalty rate.” The Fed’s actions are consistent with the first half, but not the second. If the banks need our money so badly, then why shouldn’t the Fed make them pay a premium for it?

It seems that the one thing we can always count on the Federal Reserve to do is lend money at low interest rates to big banks when large investors lose confidence in those banks. In the circles in which the Fed’s top officials travel, it is understood that such action is the highest form of public service.

This raises a number of questions. Are the Fed’s actions in the interest of the 99 percent of us who do not own many shares of European banks? Are the Fed’s actions within its Congressional mandate? Can the Fed’s far-reaching autonomy be brought within the framework of a Constitutional democracy? Does Congress care?